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Will consultants need to become Jedi Masters to retain their clients?

A dear friend (let’s call her Hannah) once told me that she was apprehensive about calling her financial advisor about her investment goals.

“But why?” I couldn’t help myself. How could this confident, successful co-worker be intimidated by the person she pays to meet her specific investment objectives?

His reaction shocked me.

Hannah described how she first violated a personal ambition to move a portion of her portfolio into socially-responsible investments, only to be politely rejected by her financial advisor.

Hannah admitted, “I don’t want to change financial advisors, but I don’t like being fired. On the other hand, is it fair to ask my advisor to change my strategy without providing any resources for guidance?”

Hannah chose to stay with her advisor, but continues to keep her eyes open for opportunities to better align her financial assets with her values.

Hannah is not alone. She is among a growing number of Gen X and Millennial women who are gaining control of trillions of dollars in wealth and who are making their investments feel best for their community, their neighbors, and the planet.

To contextualize this paradigm shift using research compiled by Community Capital Management:

  • By 2030, American women are expected to control more than $30 trillion in financial assets.
  • Millennials are twice as likely than the overall investor population to invest in companies that target environmental or social goals.

This simultaneous paradigm shift of transferring money and aligning wealth with personal values ​​means that many financial advisors are rapidly developing new skills and earning relevant credentials that appeal to sustainable-minded investors. Huh. In doing so, these financial advisors not only hope to retain their existing clients, but also harass clients who are frustrated by their current advisors’ reluctance to identify and execute socially responsible investment choices. .

According to the 2021 EY Global Wealth Research Report, clients are now investing for purpose and looking beyond financial return on investment. Financial advisors should note that 35% of clients with sustainability goals want to switch wealth managers in the next three years, which is more than double (15%) among clients without sustainability goals.

Also, a quarter of millennial clients view a sustainable investment proposition as the most important factor when selecting a new wealth manager.

While investors like Hannah can clearly articulate their desire to align their money with their personal values ​​of social justice (investments that demonstrate the characteristics of equity, inclusion, and diversity), financial advisors are often asked to help their clients. Are left without the relevant tools to meet expectations.

GenderSmart recently equipped investors like Hanna with curated resources to execute investment strategies that apply the impact lens of Justice, Equity, Diversity and Inclusion (JEDI). To create this innovative toolkit, GenderSmart called on one of the JEDI investing leaders, including the Visa Foundation, Tides and Hoggle Lovells, to share their expert approach to investing for social impact returns.

For example, Calvert Impact Capital shared its Asset Class Framework to describe how a JDI lens can be applied to different asset classes, both in product and strategy. GenderSmart also incorporated an investment framework from Edsina Social Capital, an investment and financial activism firm that has Edsina Social Justice All Cap Global ETF (JSTC),

The resulting JEDI Investment Toolkit provides actionable resources for investors who want expert guidance to make their money reflect their personal values.

While the current version of the toolkit was designed for allocators, investment influencers and intermediaries to understand the dimensions of JDI investing, financial advisors can expect to hear client toolkit questions such as:

  • Does my investment policy statement include specific policies and strategies that advance racial equality or broader social justice commitments?
  • Do you have a Chartered SRI Counselor (CSRIC) credential provided by US SIF?
  • Has your firm ever been held in a leadership role by a woman or person of color? What is the current diversity of your firm?

If you can’t already answer these questions from your customers, it’s time to start drafting talking points. Investors are being trained every day by groups like GenderSmart and Invest for Better to ask the big questions and take control of their assets.

I have already forwarded Hannah over to the Jedi Investment Toolkit and I am curious how she will use the resources to prepare the conversation with her current advisor.

For the record, no one expects you to be a JEDI master, so you might as well repack that lightsaber. Only a freelance writer has to resort to that level of gimmicks.

Andrea Longton, CFA, is the founder of social justice investors and co-host Renegade Capital Podcast, you can follow andrea linkedin And Twitter,

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